April Fool?s day was anything but a joke for Novartis as India?s Supreme Court dismissed its application for patent protection of its Leukaemia and gastrointestinal cancer drug “Glivec” in India?s lucrative $13 billion-a-year drugs market. The ruling dealt a significant blow to Pharmaceutical Multi-National Corporations (MNCs) seeking to compensate for dwindling revenues in the US and Europe by entering a new generation of growth in emerging markets.

How does this change MNC Market Entry strategies?

Yesterday?s ruling cemented India?s position on preventing “evergreen” compound patents (extending patents through modifying the compound) forming a barrier to entry against rival generic drug suppliers. The Supreme Court argued that a previous patent filed by Novartis for an earlier, chemically unstable, version of the drug (that did not make it to market) prevented them upholding the Glivec patent as the drug was too similar in design. The ramifications for the ruling are likely to spread far beyond the Indian borders as many governments re-evaluate their position on compulsory licences. As others begin to follow, Pharmaceutical MNCs will have to reconsider how they can operate within these markets and whether their pipelines are novel enough for these markets to offer profit.

The Pharmaceutical MNC view

Pharmaceutical MNC and Industry Trade groups alike have severely criticised the ruling as having significant negative impact on innovation. As Novartis reconsiders its role in R&D within India the Pharmaceutical Industry?s business model is now at risk as it is founded on the protection of intellectual property. Pharmaceutical MNCs are now likely to want their patents protected before they launch new products within India.

Healthcare advocate view

Patient advocates are calling on many countries, including Brazil and China, to consider compulsory licences in order to offer lifesaving treatments to many of their many citizens who cannot afford the costs associated with following branded medication regimes. Novartis argues that Pharmaceutical MNCs donate supplies to aid those unable to afford treatment. Whilst it is true that over 16,000 patients in India use Novartis? Glivec free of charge the generic Glivec is used by more than 300,000 patients (although this is unclear if this is absolutely free). If other countries follow India?s example the quality of life for patients, especially of those in poverty, will see significant benefits.